The investment, over four years, will create a new locally based, co-ordinated mental health crisis response.
Mental health workers will work with police and ambulance workers to tailor responses to someone needing urgent support.
The budget allocation also aims to reduce pressure on police, ambulance and emergency department resources.
Mental Health Minister Mary Wooldridge says the initiative draws on previous trials.
This article first appeared on ‘The Age’ on 4 May 2014.